It isn’t a single occurrence but a series of financial events that have led to this point. On a macro scale, the eurozone crisis seems to be offering up a daily dose of ups and downs with no clear resolution. Britain’s 2012 growth forecast was reduced to 0.6 percent from the forecast of 1.0 percent growth a month ago. Britain’s primary trade partner is the eurozone. Tuesday’s Federal Reserve meeting offered no real answers and refused to hint at another round of quantitative easing. Italy’s borrowing cost rose to a record high of 6.47%. The only redeeming spot in the equation is the U.S., with an expected average growth of 2.1 percent in 2012, signifying a gradual recovery.

Gold has a historical negative correlation to the dollar. Today, the euro dropped below a key level of $1.30; this means the dollar is getting stronger against the euro. People have perceived a strengthening dollar as a safe haven for their investments and are moving their positions. James Steel of HSBC Securities said, “Gold prices are being influenced by factors that do not necessarily reflect underlying fundamentals.” He went on to say, “One reason that we believe the underlying fundamentals have not changed and that we remain bullish long-term is the steadfastness of the Gold exchange-traded funds.”

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